Researchers warn that artificial intelligence is moving markets toward a model of algorithmic personalized pricing, where companies charge each customer a different price for the same product.
A study co-authored by Dr. Miroslava Marinova of the University of East London argues that the primary danger is not just higher costs, but the use of hidden, individualized pricing that consumers cannot see or understand.
Unlike traditional pricing models that respond to general market demand or competition, these new AI-driven systems use data-driven algorithms to adjust prices at the individual level.
These systems analyze browsing history, location data, and past purchase patterns to predict exactly how much a specific person is likely to pay before they decide to shop elsewhere.
The transparency gap
While the technology to adjust prices is not new, the study finds that AI makes the process far more precise and scalable across entire markets.
Dr. Marinova, a law lecturer at the Royal Docks School of Business and Law, says the issue centers on fairness rather than just cost.
“The concern is not just higher prices, but that people may be treated differently without knowing it,” Marinova said. “When pricing becomes invisible and personalized, fairness becomes a central issue.”
The research, published in the Journal of Competition Law & Economics, notes that consumers react negatively when they discover they are paying more than others without a clear justification.
In markets dominated by a single large firm, the researchers argue this practice could constitute an abuse of dominant position under EU and UK competition law due to its lack of transparency.
Regulators currently face a gap between advancing technology and existing legal frameworks. The UK government is already considering granting the Competition and Markets Authority stronger powers to investigate algorithms for consumer protection.
“The next step is for regulators to move from theory to action,” Marinova added. “As AI pricing becomes more sophisticated, the question is no longer whether this can happen, but how far we are willing to allow it to shape everyday markets before clear rules are put in place.”
